In the long run, which of the following depends primarily on the growth rate of the money supply?
a. the natural rate of unemployment and the inflation rate
b. the natural rate of unemployment but not the inflation rate
c. the inflation rate but not the natural rate of unemployment
d. neither the natural rate of unemployment nor the inflation rate
c
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When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
The directive of prompt corrective action means that
A) the FDIC will intervene earlier and more vigorously when a bank gets into trouble. B) the banks must take actions quickly to resolve reserve disputes. C) bank failures cannot occur. D) there must be an immediate response to an increase in interest rates.
The Goldin and Lewis (1975) study of the costs of the Civil War:
a. finds peaceful abolition of slavery would have been more costly than the War. b. fails to include an estimate for the loss of human capital due to the War. c. estimates the total cost of the War at more than double national income in 1860. d. finds Northern property damage to be a major factor in the War's cost.
When a firm's fixed costs increase it should raise its prices in order to maximize profits
a. True b. False Indicate whether the statement is true or false